Rapaport Weekly Market Comment

Coronavirus brings unprecedented disruption to diamond industry as US retail, India manufacturing and South Africa mining shut down. $2 trillion stimulus will inject liquidity into US economy and relieve stress among small businesses. Signet Jewelers closes stores; reports 2019 sales -2% to $6.1B, profit of $106M vs. loss of $657M the previous year. Share price rallies post-earnings but down -55% since Jan. 1, market cap at $384M. GIA closes US, Belgium and India labs. India provides concessions for diamond companies as Surat and Mumbai on 21-day lockdown. Ekati, Finsch, Cullinan, Letšeng mines placed on care and maintenance. De Beers enables 100% deferrals at March 30 sight. The next issue of the Rapaport Price List will be published on May 1. The March 20 Price List is the official list until then.

Fancies: Fancy shapes sluggish as coronavirus hits US, the strongest market for commercial-quality, medium-priced fancies. Weakness across all categories, including top makes and large sizes, as luxury brands temporarily shut stores. Downtrend due to external forces beyond industry’s control and affecting all products. Inventory levels still low in some categories of Pears and Ovals, but very little demand. High availability of other categories, with Cushions showing similar price declines to rounds. Off-make, poorly cut fancies illiquid and difficult to sell.

United States: Deep concerns about future of diamond industry. Several states including New York and California on lockdown. No activity on 47th Street with Diamond Dealers Club closed. Retailers shutting stores and manufacturers closing factories. Business shifting online but demand is weak while country focuses on battling coronavirus.

Belgium: Bourses remain closed. Limited activity as dealers are working from home and demand is at a standstill. Rough tenders still taking place but market slowing as manufacturing shuts down due to pandemic. Government offering support measures for businesses during the crisis.

Israel: Israel Diamond Exchange closed as government tightens measures to prevent spread of virus. Minimal sales as US retail shuts and Far East demand has not yet recovered.

India: Trading collapsed due to coronavirus shutdown in all key retail markets. Rising concerns about spread of COVID-19 within India. Surat polishing industry closed as the country enforces nationwide 21-day lockdown. Bharat Diamond Bourse in Mumbai closed. Government announces concessions to help small businesses with financial difficulties and prevent bankruptcies. Depreciation of rupee (-4% since March 1 to INR 75.2/$1) increases pressure on suppliers.

Hong Kong: Second wave of coronavirus cases curbs hopes of turnaround. Municipality bans non-residents from visiting in next two weeks and enforces quarantine for subsequent arrivals. Organizer suspends preparations for May Hong Kong show due to difficulties for foreign attendees. China retail sales gradually improving as government relaxes lockdown in Wuhan, where outbreak started in late 2019.